Scenario One: Reluctant buyer
T: So, you want to sell them to me for 1000, I want to pay 800. I say, “You see, I can’t pay more than 800!” Your move?
S: Uh, well, you see, it does not cost 800, it costs 1000! It is a product of your dream, so you should pay for your dream to come true!
T: You see, all this, of course, is right, everything is wonderful, but you should understand me, too. According to my budget and my capabilities, I can’t pay more than 800. I already pay 700 to others, but I’m ready to make a concession and pay you 800 for your goods.
[It would seem that he is all radiant with kindness, a kind of “uncle sugar daddy” who at first sight fell in love with “frolicking kids.” Before you believe in that, think for a second, why on earth would he suddenly fall in love with your business? Isn’t your success all the same to him? He fell in love with a fat slice of your pie! He is going to buy from you for 800 and then resell for 1200. You are at a loss, but he is golden. You are a victim, and he is a predator.]
S: You see, we cannot sell for less than 1000! It costs us so much, and we sell it to others for 1200, but we will sell it to you for 1000. Especially for you we provide such a big discount!
T: I understand you. Well, you see, but I can’t pay more than 800. Therefore, let’s settle for 800. Actually, for more no one will buy it from you.
S: Well, we have buyers who buy for this price ...
T: There are still enough suckers in this world. As far as I know the situation in the market, not a single serious buyer will take it from you for more than 800. I think that basically they would offer you 700. You see, I offer you much better terms, I like you, so let’s agree on 800.
S: Well, let’s say if... well, it will be a concession, but I could try... Well, if you say that you can buy for 800. So, let’s divide this thousand, say, into two payments, say, 800 and 200.
T: No, no, it’s not about payments, it’s about price. You understand, I don’t care, I could pay you 15 a day or 800 at once. This is the same. It’s not about splitting the payments, it’s about price. Believe me, more than 800 you cannot find anywhere. Well, maybe there are a couple of suckers that you can cheat, but as far as I know the market, you are unlikely to sell it to anyone for more than 800.
S: Well, we didn’t meet by chance. We made an appointment. And I see in your perseverance, you are interested in this product, because it still has some advantages, otherwise you would meet with others and buy a similar product, and therefore I see how important this is, how valuable it is for you. And therefore, I believe that you need to think again...
T: You say everything correctly, very convincingly and very correctly. This is why I offer you not 700, but 800.
S: [Nervous laughter].
T: Yes, I want to buy, so I offer you, you see, an entire 100 more than I offered to others. Others would buy from you, probably, for 700.
S: What does the others have to do with it? We are aware that others are not your concern. Maybe they buy for 700...
T: I just explained to you that this is the situation in the market. This is the market price, 700. But because you have a slightly better product than other suppliers, I offer 800. That’s all. See, I’m going easy on you.
S: Yes, but what you initially say is that this product is better than others, and you offer more than to others, it means that this product costs 1000, not 800!
T: No, it is not what I said. An ordinary product on the market now costs 700. Yours costs a hundred more, but not 300, not one and a half times, in any case. So, 1000 is a completely unrealistic price, the real price of your product is 700, but I am kind to you, and I like you and your product looks pretty, I agree with that, so I offer you 800. This is the maximum, you generally would not find such a maximum anywhere on the market.
S: Well, about the market, this is a controversial issue. This is my professional field, and I perfectly understand who, where and how. And once again I tell you: the fact that you came to me and are talking to me now, no matter who buys for which price, the price is the same for everyone. And the choice of price corresponds to quality, all patents, and certificates. I understand that there may be some analogues on the market, but these are only analogues, they are not genuine. Ours is the only genuine product.
[An attempt to solve an unsolvable problem by logic: you want to sell for 1000, but he does not want to buy for more than 800. There is no logical solution to this problem! Therefore, this whole conversation seems to a bystander somewhat pointless...]
T: You know, our customers are not interested in generics. They are interested in price, and they buy from us at the price which they consider reasonable. Therefore, in order for me to make a little profit, I have to offer you no more than 800. I can collect a maximum of 820 from buyers for this product, OK? I just can’t offer you more. I know my buyers better than you, OK? And they buy from me. In total I collect 820. I take risk by lifting a price for my buyer. If I buy from you for 700, I would put the fair price 750, and everyone would be happy. But okay, I’m going easy on you. I agree to buy from you for 800, then my margin becomes pretty small.
S: Why not explain to the buyer that this product is completely different?
T: You see, the principle of my trade is that a buyer buys from me, I can’t make each of my sellers stand and explain for a long time why this particular product should cost more. The buyer comes, he either buys or does not buy. That’s all. I feel my customer, I’ve been working with these customers for 40 years. I know them almost by sight, I know all their tastes, wishes and capabilities, and I understand that they will buy this product from me at 0.82, and you offer me a batch of 1000 pieces, I will get 820. At 0.82 they will still agree to buy, but not a bit more. I know this one hundred percent. Therefore, I offer the maximum I can buy at, this is for 800 a batch. Like that. 800. Settle for 800. Everything will be fine!
S: To whom will it be fine?
T: Why, to you. You sell your product at a very decent price.
S: No, this price does not suit us. I understand everything, you are very professional, you know your buyer, but, at the same time, I am confident and know my product. People, when they come to me, they perfectly understand what they pay for, how much they pay, and all this justifies itself. Therefore, maybe in your case it does not fit, maybe you do not need my product? Maybe this meeting was a mistake?
T: I absolutely agree with you that you have a wonderful product, and therefore I give you the best price for it, the best in this market, the best in this region, in the current millennium. 800 per batch. And not a bit more. I am going easy on you!
S: I really appreciate your perseverance, I understand that you are going easy on us. But this is not quite easy, because 200 is a very big difference. You generally said 700, where did you get this figure from? I don’t understand at all.
T: This is the standard price in our market.
S: I understand that the standard price is certain, it is X. But because we are talking about exclusive goods, it must be sold on exclusive terms.
T: Of course! Look, I give you exclusive terms, 800! Not standard 700, but rather 800. But I cannot pay you more!
S: But how ... You said you want to win something, in your case.
T: I can’t buy at a loss!
S: Yes, you cannot buy and sell at a loss. But what if you think about some options? I understand that to stand and talk about the fact that this product costs so much, and this one is so much, and why it is more expensive so many times... This is not an option, but maybe there are some other options?
T: No, my customers are not interested in advertising, and by definition... I have tried more than once with them this way and that, I know that they have a maximum in their head, 0.82 per package. Therefore, all that I get from your batch is 820, and not a bit more. I am going easy on you, I am reducing my profit from 50 to 20, but I can’t go further. I start working at a loss. What is in it for me?
S: Well, let’s think together what options we have!
T: I already showed you all the options. My customers do not pay over 0.82.
S: No, it is necessary to suit you and suit me. Because we, too, cannot sell at a loss!
T: You see, if you want to enter this market, you need to play by its rules. I understand all your good intentions. You would love to take a million for this part, but who will give it to you? Therefore, I offer you the following: I showed you what this market can bear; I offered you the highest real price, it’s 800. You won’t get a higher price anywhere else; you won’t be able to sell anywhere else. So, agree – or goodbye!
S: It bothers me a little that you consider yourself a representative of the whole market, that you speak for everyone in this market, that we cannot sell for 1000.
T: You see, being in this market for 40 years I know all the players, and all the buyers, and statistics. 40 years is 40 years, and I understand what I’m talking about. I know what I’m talking about. So, 800 is the maximum.
S: I understand you, I really appreciate your experience. But your experience – it was created from many days of communication with everyone, with customers, and I’m not saying that we don’t need to train our customers to value something better, more exclusive, so that they spend the time that they’re used to for their whole life lived, and will live. My company represents a definite breakthrough in this area, and this breakthrough changes slightly the rules of the game. These rules of the game of a 40-year-old professional – maybe, it’s worth changing them a bit? We need to think how to make it so as to include some, say, expand, say, diversity and bring something newer, something else. And, of course, at a different price. I am sure that your customers will look at it differently, and they will accept it because you have credibility, they trust you. Who can have such credibility, such trust, if not for you, a person with 40 years of experience?
T: Dear girl, for 40 years I’ve seen so many new products here that should have changed everything in the world but haven’t changed anything. I saw the arrival and departure of many goods, their varieties...
S: Take a test batch for 1000! A trial batch, a small one, and you will see that I’m right!
T: Look, with a trial batch... I don’t even offer it to you, because I treat you well. To enter our market, a test batch must be set for 200. Yes, then you can first attract the buyers at a low price, and when they appreciate the taste, you can gradually increase this price. But then you need to start with 200, and not with 800. I offer you the option, see, with the largest possible price, while I believe that it is quite possible to introduce you to this market. But if you want a trial batch, it’s 200, and not a bit more! That’s it. A trial batch is usually for free. But I offer you, appreciating your charm and well-designed goods, I agree to take a test batch for 200. But in principle, I tell you that you can do without this, because if I take 200 now, then in a year you can increase maximum by 50. And that’s it.
[A trial batch is a politically correct term for freebie or robbery. A batch of goods is taken from you for free, and all the proceeds go to reseller’s profit. The costs are yours. What then? Reseller explains you that your product turned out to be bullshit, and the best price is 200, not 1000. Or he won’t explain anything, just won’t take it anymore.]
S: I understand that earlier it was customary to go along the path trodden by professionals, and then the product would provide 100% profit. I offer you something completely different - maybe a pilot project, with some specific risk. I understand that this is definite, let’s say ... well, yes, having seen everything and understand everything, it can be really hard to believe in it. But still, the very thing that keeps you here and holds me here with you, is I’m trying to understand you as much as possible, and to try to explain and come to a common decision that this pilot project is still a little expansion of the boundaries of your worldview... there are people who are looking for...
T: I’m sitting here and thinking, “For God’s sake, why am I sitting here?” Well, I understand that it’s very pleasant to me, an elderly person, to talk with a pretty lady. But, you see, I won’t pay for it from my wallet. Nice talk is nice talk, but business is business. I tell you the business: either a trial batch for 200, and I guarantee that I will sell it off in 2 weeks, or we immediately start in a normal way, so to speak, with 800, and that’s it! And we'll see. If my customers are willing to accept a higher price. I will do the following: I will deliver this product; I will deliver it for 0.9. If they walk past and turn up their noses, I will start to reduce the price, and when I reduce it to 0.82, they will probably start buying. This is what my experience says. But, if it just turns out that I should sell it longer, I just get less turnover, I just risk it, I occupy a space on the shelves of my stores. Just out of my good attitude towards you. And nothing more. But for this purpose, I need to buy at 800. Otherwise, I lose on this, and to me this seems meaningless.
S: Well, of course. Until now, I listened, tried to understand why you came to this particular price 800, how it will affect your customers and what kind of income you will have, or vice versa, what kind of waste you will have in relation to income. Whether you win or not win, will the customer be satisfied or not satisfied. Now let’s talk about my problems. I ask 1000 not not only because my product is exclusive, but also because I have to pay for the warehouse, because my product must be fresh, and just as you are responsible to your customers, I must be responsible for quality and all sorts of things that are really important to some of my customers. Each delivery of a container entails a payment of all taxes, duties, and other various payments, even before I sell it all. In addition, refund or non-refund, everything is possible, yes, maybe no. What else do we have? Say the rental of this store. And time...
T: Yes, I understand all that.
S: I’m not saying, let’s compete now, who has more and how, I just explained that your price consists of two overheads, and I have many small ones...
T: Your problems are yours. I understand that you have chosen an unreasonable business model, and I am not to blame you for that. I just tell you the rules of this market. You missed the opportunity to get acquainted with the realities of the market, rushed into the business, and it turns out that your costs are too high. Well, look for ways out of that...
I understand everything. My dear lady, you shouldn’t have jumped into this business. It is not as simple as you think. I tell you out of my kindness the things that no one else will. Therefore, I say: I am ready to display your product in my stores, yes, I am ready to distribute it, but understand me correctly: the maximum that I can pay you is 800. Not a bit more. Period.
If you do not want to listen to me, well, continue spending your savings on the warehouse, on whatever else. When you hit the bottom, you come to me and give me all your goods for free. Just for me to take them off your hands. That’s all.
[In short, this sale ended in nothing. Both sides defended their positions: 1000 and 800. They cannot be budged from these positions even by a battle tank. Probably, they say goodbye with that. The sale went totally wrong.]